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Draghi Holds a Presser With the Brits
CNBC.com | December 22, 2011 | 09:23 AM EST

Mario Draghi holds a presser with the Brits. I mentioned yesterday that much of the 489 billion euros ($640 billion) that banks borrowed from the European Central Bank will go to paying off prior, shorter-term loans from the central bank. The Telegraph notes that about 300 billion ($391 billion) of that will indeed be used to pay off those old loans, so we are talking about roughly 200 billion ($261 billion) in "new" money.

And 200 billion euros is not a lot of money, but there will be another round of three-year lending from the ECB , at the end of February. After that: New bank rules which will require most of the large banks to raise their core Tier 1 capital ratios by next June. Raising capital will be difficult, so most observors still believe that deleveraging — cutting loan books, for example, is the most likely path.

What's next from Mr. Draghi and the ECB? He is scheduled to hold a press conference today with Mervyn King, head of the Bank of England, today about 11 a.m. ET. The big question: How far can he can push the Germans? Doves are clamoring for aggressive (50 basis points) rate cuts by February. And quantitative easing? Draghi is holding the line, insisting no. For the moment.

Elsewhere:

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